Current Price
$88.73
PE Ratio (TTM)
28.3x
Intrinsic Value
$72.73
-22.0% margin of safety
What Is Sempra's Fair Value?
As of 2026-07-30, applying a 28.0x earnings multiple to Sempra's (SRE) earnings per share of $3.17 yields a fair value estimate of $72.73 per share, versus a market price of $88.73.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $60.53 to $86.7. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · SRE intrinsic value (DCF view)
Is Sempra (SRE) Overvalued?
At $88.73, SRE trades above its PE-based fair value estimate, meaning the market pays a premium over the applied earnings multiple. By this model the stock looks expensive unless earnings grow into the price.
COMPETITIVE MOAT
↑Regulated Utility Monopoly
Sempra operates regulated utilities in California and Texas, granting it exclusive service territories. This creates a natural monopoly with high barriers to entry for competitors.
↑Essential Service Infrastructure
The company owns and operates critical energy infrastructure, including gas pipelines and electric grids. These are essential services with significant capital investment requirements, deterring new entrants.
↑Long-Term Contracts & Customer Lock-in
Sempra benefits from long-term contracts for energy delivery and infrastructure use. Customers face high switching costs and are tied to the existing infrastructure for essential needs.
INVESTMENT RISKS
↓Extreme Weather Events
As an energy infrastructure provider, Sempra is exposed to risks from severe weather events like wildfires and storms. These can cause damage, disrupt service, and lead to significant repair costs.
↓Interest Rate Sensitivity
Utilities are capital-intensive businesses that rely on debt financing. Rising interest rates can increase borrowing costs, impacting earnings and the ability to fund new projects.
↓Cybersecurity Threats
The increasing reliance on digital systems for grid management and operations makes Sempra vulnerable to cyberattacks. A successful breach could disrupt services and compromise sensitive data.
Base case
SRE base case PE valuation
Intrinsic Value
$72.73
Margin of safety
-22.0%
Expected annual return
-3.9%
Base case assumptions: 1.8% annual earnings growth, 28x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SRE PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Sempra respond.
Open PE Calculator for SRECompany Overview
Sempra, an energy holding company founded in 1998 and headquartered in San Diego, California, conducts its operations both domestically and internationally. The firm adopted its current name in July 2021, having previously been known as Sempra Energy. Through its San Diego Gas & Electric Company division, Sempra delivers electricity to approximately 3.6 million individuals and natural gas to roughly 3.3 million individuals across a 4,100 square mile service area. The Southern California Gas Company segment manages an extensive natural gas network, encompassing distribution, transmission, and storage infrastructure, which supplies gas to an estimated 22 million people within a 24,000 square mile territory. Furthermore, Sempra's Texas Utilities division specializes in the regulated transmission and distribution of electrical power, serving 3.8 million residential and commercial customers. This segment oversees 140,000 miles of transmission and distribution lines, including 18,249 circuit miles of transmission lines and 1,174 transmission and distribution substations. It also features interconnections to 130 third-party power generation facilities with a combined capacity of 45,403 megawatts.
Financial Metrics — SRE PE Stock Valuation Data
PE Ratio (TTM)
28.3x
PEG Ratio
n/m
Earnings Yield
3.57%
ROE (TTM)
6.5%
Revenue/Share (TTM)
$20.82
Dividend Yield
2.94%
Debt/Equity
1.13x
Frequently Asked Questions
What is the PE ratio of SRE?
The trailing twelve-month PE ratio of SRE reflects how much investors pay per dollar of Sempra's earnings. This metric is most useful when compared to Diversified Utilities peers and the company's own historical range.
Is SRE overvalued based on PE ratio?
SRE's PE of 28.3x combined with a PEG ratio of -0.90 provides a growth-adjusted perspective. SRE has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Diversified Utilities, a DCF analysis may be more appropriate.
How do I value SRE stock using PE ratio?
To value Sempra using PE: (1) Compare the current PE (28.3x) against the Diversified Utilities median to assess relative pricing, (2) check the PEG ratio (-0.90) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of SRE?
SRE's PEG ratio is -0.90, calculated by dividing the PE ratio (28.3x) by the expected earnings growth rate. Because SRE has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for SRE stock valuation?
PE ratio gives a quick relative read — how SRE is priced versus Diversified Utilities peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See SRE DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Utilities valuationsP/E and DCF value SRE with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.